Portugal’s ‘ghost’ presidency racks up in-person expenses

COVID-19 may have relegated Portugal to having a “ghost presidency” unlikely to hold flashy summits — but that hasn’t stopped Lisbon from spending as if it was expecting in-person events to be the norm during its six months leading the Council of the EU.

Since taking the reins of the rotating Council presidency in January, Portugal has signed contracts worth hundreds of thousands of euros to acquire equipment, drinks and even clothing for events that are unlikely to be held in person.

The presidency spent €260,591 to equip a press center in Lisbon — even though the presidency’s press briefings are being held online and foreign journalists aren’t traveling to the Portuguese capital. It agreed to pay a wine company €35,785 for drinks — at a time when few people are gathering. And it signed a €39,780 contract to purchase 360 shirts and 180 suits — at a time when many people are working from home. 

In addition to the expenditures, watchdog groups have expressed unease at corporate sponsorships the Portuguese presidency has signed with various companies, including some that appear to go against signature EU policies and one that is known as a soft landing pad for Portuguese politicians. 

“The presidency seems to be less about work meetings and more about selling Portugal to the outside world,” said Susana Coroado, president of Transparência e Integridade, the Portuguese wing of Transparency International.

The Portugese presidency said it was simply doing due diligence by preparing for the potential of in-person meetings in a few months’ time. 

Despite the pandemic, it could not “simply disregard the possibility of holding physical meetings at some point in the near future,” presidency spokesperson Alexandra Carreira said in an emailed statement. Because of that, she added, the presidency had undertaken “adequate and timely preparations.”

For instance, Carreira said, the shirts and suits had been acquired for the chauffeurs that have been tapped to drive any official delegations that may visit Portugal during the country’s six-month tenure heading the Council.

Yet the presidency did not explain why suits — an unusual expense even when compared to presidencies in non-pandemic years — had been acquired for the chauffeurs, who are Portuguese state employees and would presumably already be outfitted with the clothing needed to carry out their duties.

And while rotating presidency swag is a familiar sight within the Brussels bubble, Portugal’s unusual expenses have raised eyebrows.

One veteran diplomat recalled that national governments had previously distributed “presidency ties, scarfs, pins, bags, pens, notebooks, umbrellas, roll-ups, some food products, snowballs, towels, music discs, power banks, memory sticks, transport tickets, cooking books, digital cameras, etc.”

Full suits for drivers, however, were a new one.

A moment in the spotlight

The rotating Council presidency can offer often-forgotten EU countries a rare moment to shine.

National governments usually try to use the opportunity to play to their home audiences and hype their own importance by hosting grand events that lure international leaders to their countries.

In the age of COVID, however, the in-person soirées that draw visiting commissioners and MEP delegations have been largely replaced by austere virtual summits that don’t quite dazzle national constituents. Indeed, officials across the EU have quickly adjusted to online events and meetings.

But in recent months, Portugal has shown itself to be determined to ignore that reality.

To observers, one of the more baffling decisions the presidency made was spending hundreds of thousands of euros furnishing the press center in Lisbon, a city that has experienced a dramatic rise in new coronavirus cases this year.

The public project was entrusted to a company that hasn’t obtained a public contract since 2011, and whose previous experience in public sector contracts involved organizing entertainment for village festivals.

Lisbon-based journalists who spoke to POLITICO on the condition of anonymity described the press center as a “ghost town.”

While they acknowledged that there were tables and chairs set out for reporters in a “large, empty space,” they said that few journalists — mainly photographers and TV crews — used the space regularly.

“We’re in the middle of a pandemic and can follow press conferences and ask questions on Zoom — why would anyone go to the press center?” said one member of the Lisbon press corps. “I shudder to think what the government spent on it.”

Carreira, the presidency spokesperson, argued that a press center needed to be available to offer standard working conditions for any journalist who turned up at the headquarters.

Questionable sponsorships

In addition to the expenditures, watchdog groups have expressed unease with the corporate sponsorships the Portuguese presidency has signed. 

There are deals with two Portuguese beverage companies — coffee producer Delta Cafés and soft-drink group Sumol + Compal — and an agreement with Portuguese pulp and paper giant The Navigator Company.

At a moment when Brussels is rolling out the EU Green Deal, Farm to Fork strategy and the EU Cancer Plan, Suzy Sumner, campaigner for the European consumer organization Foodwatch, said Portugal was wrong to use its presidency to actively promote “sugar-filled soft drinks” that have “direct effects on health and the environment.”

Campaigners have been even more disturbed by the deal with Navigator, a company that last year received a €27.5-million loan from the European Investment Bank, and that has historically been known to serve as a revolving door for Portuguese politicians. 

Similarly, Portuguese climate justice organization Climáximo‘s Manuel Araújo questioned why the presidency would link itself to a company whose vast eucalyptus plantations have been linked to deadly forest fires in Portugal and land grabs in Mozambique.

“It is completely unacceptable that EU governments are signing sponsorship deals with companies, many of whom have ambitious EU lobbying agendas, and whose products are in direct contradiction to the policies that are being developed,” Araújo said.

In a statement, Navigator defended its forest management and fire prevention practices in Portugal and rejected all accusations of land-grabbing practices in Mozambique. It added that it had not had politicians join the company as directors, nor had former directors joined the Portuguese government, since Navigator’s privatization in the early 2000s.

Navigator also noted it was not the first time that it had worked with a Portuguese Council presidency, and said that it had done so “with the sole consideration of printing the logo on the materials chosen by the government.”

Carreira, the presidency spokesperson, said the sponsorships were “aimed at fulfilling current day-to-day needs” related to in-person events still being held at the presidency’s headquarters and attended by “members of government, their staff and other civil servants.”

“There is no European legal framework preventing Presidencies from using such contracts,” she added, insisting that the deals were compliant with European and national law.

Council presidency or tourism junket?

Coroado, the head of Transparência e Integridade, said the contracts and sponsorships reflected a country that lacks proper oversight of public spending and has a bad habit of “trying to use high level, international settings to promote itself.”

Coroado pointed out that, despite record-high numbers of new coronavirus cases in Lisbon in January, the presidency had insisted on hosting in-person meetings with several members of the Commission in the Portuguese capital just weeks into the new year.

Although those meetings ended with three commissioners quarantined after interacting with a Portuguese minister who tested positive for the coronavirus, the government isn’t backing down. Last week, Portuguese Minister of Labor, Solidarity and Social Security Ana Mendes Godinho told a European Parliament committee that the presidency was determined to ensure the “greatest possible participation” at an in-person social summit her country intends to hold this May in Porto. 

“The government is behaving like the orchestra on the Titanic, determined to put on five-star events even when it’s clear that they shouldn’t be going on,” Coroado said.

The Transparência e Integridade president said that although she could comprehend the government’s determination to sign contracts in the hope that the in-person events might yet happen, the specific agreements were, at best, “very odd.”

“This is very typical in Portugal, where our public contract system is very problematic,” Coroado said. “There’s no justification of expenses, no mechanism in place to avoid conflicts of interest, and contracts are often awarded to ‘friendly companies’ favored by the government.”

“Unfortunately,” she added, “it’s very hard to prove corruption because the lack of professionalism in the public contract system is such that the misuse of funds is often due to incompetence rather than outright fraud.”

Last September, the European Commission seized on that issue in its 2020 Report on the Rule of Law, chastising Portugal for not doing enough to fight corruption.

At the time, Commissioner Didier Reynders said that although the country had created a legal framework to promote transparency, it had failed to set aside the resources to properly carry out that mission.

“We have a lot of EU recovery funds headed our way, and many people are worried about how we’re going to guarantee the good use of that money,” Coroado said.

“Last year, we were very offended when some northern countries said that they were reluctant to give us that money because we were going to misuse the funds,” she added. “But when [the presidency] does things like this, it’s normal that others express skepticism towards us.”

Paul Ames contributed reporting.